Alberta farmers file what may be the first class action lawsuit for unpaid oil leases


Two Alberta landlords have filed what, according to a lawyer, may be the first class action lawsuit against an energy company for failing to pay the rent.

“It’s a pretty clear deal,” said attorney Matthew Farrell, who represents Reinhold and Thyra Kautz of Strathmore, Alta., In their class action filing against AlphaBow Energy Ltd. of Calgary.

“They should pay every year and now (they aren’t). You can’t do that.”

In a complaint statement filed in Calgary on November 4, the Kautzes say AlphaBow has reneged on a lease that compensates them for the oil and gas company’s access and use of two plots of land.

A deal is a deal

The document cites a May letter from AlphaBow, which says, “Due to the severe impact of the COVID crisis that the oil and gas industry is currently facing, AlphaBow Energy Ltd. informs that AlphaBow is postponing any surface rent payments for Now.

“AlphaBow will review all outstanding rentals within six months and determine at that time what our plan is for recovering outstanding rental commitments.”

A deal is a deal, Farrell said.

“If I lose my job, I still have to pay the rent,” he said.

“When times are good, it’s not that (landowners) are given bonuses. If it’s okay to treat them that way when times are good, then oil companies should (pay) when times are bad.”

The claims of the lawsuit have not been tested in court. No defense statement was made, and an AlphaBow spokesperson did not respond to a request for comment.

The Kautzes are the only plaintiffs at this point and are not required to a large sum of money, Farell said. But he noted that AlphaBow has faced hundreds of landowners and expects the damages to add up as others join the class action, which has not been certified by the courts.

“It’s the kind of injustice that class actions are designed to remedy.”

Last critical point for the industry

It is the latest sticking point for an industry struggling with low oil prices.

Earlier this year, many rural municipalities in the province learned that energy companies would not pay a total of $ 173 million in municipal taxes. Since then, the United Conservative government of Alberta has granted the industry a three-year property tax exemption on new wells or pipelines and lowered taxes on older wells.

Attorney Keith Wilson, who has worked on similar disputes between industry and landowners, said the lawsuit is groundbreaking.

“It is the first time that there has been any form of class action against oil companies. It is a real sign of the extent to which the relationship and the normal institutions that have been in place to keep the peace between two critical industries are standing. faltering “.

Alberta’s Surface Rights Board steps in to judge disputes, and the provincial government has a mechanism to cover unpaid leases. Freedom of information documents obtained by The Narwhal magazine show that Alberta paid $ 8 million in such requests last year.

The industry has repaid about $ 300,000 of that, the documents say.

“It’s not fair and it’s not fair,” Wilson said. “We have created a political culture in our province in which no politician is ready to deliver bad news to an oil company or remind them of their obligations.”

Source link